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What Makes More Sense: Flat Taxes or Redistribution of Wealth?
Greetings!
Disputations asked about the fairness of my distributive or progressive tax schemes in terms of social justice. The idea is to tax the rich higher percentages than the poor.
In an unrelated blog posting, Steve Bogner even went so far as to threw a bunch of figures together to show in graphic terms that the Bush tax cuts are a larger percent for the poor than they are for the rich.
I did some google searches to dicover what current tax percentages for each class are today, and found a helpful chart on the bottom of this article: Moving Toward a Flat Tax. I then went to the CIA figures on U.S. population, which is listed at 290,342,554. Combining the data, I present below three tables combined into one using frontpage editor. I hope this works (never tried this type of coding before). I also hope it is clear enough. If it's not clear, I hope you can get enough of the idea to try using the table in the article link to create an Excel sheet yourself, and see if your don't get similar results.
The top table indicates Bush's 2001 tax in each income bracket according to the article. I then project the amount of revenue generated in each class based on the population size and average income for each group, displaying each groups average tax per person as part of the calculation. The final number below each set of quintiles represents a total.
In the middle portion of the table, I calculate what a flat tax would look like to generate as close to the same revenue as Bush without going under Bush's budgeted revenue. The closest I could come was a 33.09% tax, which really socks it to the poor if we are to keep current services. I show just how much each group changes per person and as a group. Again, I total the sum and compare it to what Bush would bring in.
We can see this is grossly unfair to the poor, and may actually cause people to go without basic necessities. If I did this right (I'm no economist), it should decisively shut down any notion of a "flat tax".
Then, in the lower portion, I show what it would like if I were aiming for Bush's estimated revenue by increasing the top quintile 2 points each over the surrent Bush numbers, and decreasing the bottom four quintiles by the same 2 points from Bush's current plan (I'm giving more back to the middle class than Bush, and if I did my math correctly, it does work, and even brings in a little more revenue than Bush).
Since the wealthy become wealthy on the backs of the poor, I would argue this is the general direction we should be headed. I presented Disputations arguments for the ethics of this that can be summarized in paragraphs 1938 and 1947 of the CCC.
I hope all this makes sense. Try plugging the numbers in Excel or Lotus, and play with them yourself (maybe I made a mistake - I'm not an economist, and don't claim to be a math wiz):
Total Population 290,342,554 Average income 2001 Tax with Bush cuts Per person avg Tax number of people in group average revenue Quintile 1 Top 1 Percent $1,028,000 41.70% $428,676 2,903,426 $1,244,628,846,785 Quintile 1 Next 4 Percent $204,000 35.80% $73,032 11,613,702 $848,171,896,149 Quintile 1 Next 15 Percent $96,200 34.70% $33,381 43,551,383 $1,453,806,139,814 Quintile 2 $56,100 31.90% $17,896 58,068,511 $1,039,188,262,426 Quintile 3 $34,300 28.50% $9,776 58,068,511 $567,648,727,325 Quintile 4 $20,700 24.20% $5,009 58,068,511 $290,888,398,002 Bottom Quintile $9,400 19.40% $1,824 58,068,511 $105,893,736,295 Total $5,550,226,006,796 Total Population 290,342,554 Average income Flat Tax Per person avg number of people average revenue Quintile 1 Top 1 Percent $1,028,000 33.56% $344,997 2,903,426 $1,001,672,520,338 Quintile 1 Next 4 Percent $204,000 33.56% $68,462 11,613,702 $795,101,922,759 Quintile 1 Next 15 Percent $96,200 33.56% $32,285 43,551,383 $1,406,044,208,996 Quintile 2 $56,100 33.56% $18,827 58,068,511 $1,093,265,143,793 Quintile 3 $34,300 33.56% $11,511 58,068,511 $668,431,273,300 Quintile 4 $20,700 33.56% $6,947 58,068,511 $403,397,299,047 Bottom Quintile $9,400 33.56% $3,155 58,068,511 $183,185,246,910 $5,551,097,615,143 Tax difference Top 1 Percent decrease -20% -$83,679 -$242,956,326,447 Next 4 Percent decrease -6% -$4,570 -$53,069,973,390 Next 15 Percent decrease -3% -$1,097 -$47,761,930,818 Quintile 2 increase 5% $931 $54,076,881,368 Quintile 3 increase 18% $1,736 $100,782,545,974 Quintile 4 increase 39% $1,938 $112,508,901,045 Bottom Quintile increase 73% $1,331 $77,291,510,615 $871,608,347 Total Population 290,342,554 Average income Jcecil3 Tax Per person avg number of people average revenue Quintile 1 Top 1 Percent $1,028,000 43.70% $449,236 2,903,426 $1,304,323,275,887 Quintile 1 Next 4 Percent $204,000 37.80% $77,112 11,613,702 $895,555,800,962 Quintile 1 Next 15 Percent $96,200 36.70% $35,305 43,551,383 $1,537,599,000,899 Quintile 2 $56,100 29.90% $16,774 58,068,511 $974,035,393,308 Quintile 3 $34,300 26.50% $9,090 58,068,511 $527,813,728,917 Quintile 4 $20,700 22.20% $4,595 58,068,511 $266,848,034,530 Bottom Quintile $9,400 17.40% $1,636 58,068,511 $94,976,856,264 $5,601,152,090,768 Tax difference Top 1 Percent increase 5% $20,560 $59,694,429,102 Next 4 Percent increase 6% $4,080 $47,383,904,813 Next 15 Percent increase 6% $1,924 $83,792,861,084 Quintile 2 decrease -6% -$1,122 -$65,152,869,118 Quintile 3 decrease -7% -$686 -$39,834,998,409 Quintile 4 decrease -8% -$414 -$24,040,363,471 Bottom Quintile decrease -10% -$188 -$10,916,880,030 $50,926,083,972
Peace and blessings!
jcecil3
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posted by Jcecil3 1:53 PM
